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CIRCULAR No

CIRCULAR No. 6-TM/XNK ON THE 16TH OF MAY, 1994 AS ADDITIONAL GUIDANCE TO THE IMPLEMENTATION OF DECISION No. 78-TTg ON THE 28TH OF FEBRUARY, 1994 OF THE PRIME MINISTER

As follow-up to Circular No. 4-TM/XNK on the 4th of April, 1994 of the Ministry of Trade;

Pursuant to the opinion of the Prime Minister (in Document No. 2448-KTTH on the 6th of May, 1994);

After having reached agreement with the General Customs Office, with the State Bank, the Ministry of Trade;

Provides the following readjustments and explanations to some points mentioned in Decision No. 238-TM/XNK on 24th of March, 1994 and in Circular No. 4-TM/XNK on the 4th of April, 1994;

Part One

QUESTIONS PERTAINING TO DECISION No. 238-TM/XNK

A. READJUSTMENT OF DOCUMENT:

I. Commodities banned from export:

"Wicker as raw material" is added to "rattan as raw material" in Point I/5.

II. Commodities banned from import:

Besides commodities mentioned in Decision No.238-TM/XNK, the following is added:

1. The importation of two-wheel motor vehicles with 175 cm3 cylinder capacity and more shall continue to apply according to Decision No.258-TTg on the 29th May, 1993 of the Prime Minister.

2. The Prime Minister has decided not to allow the importation of left-drive automobiles (Documents No.3648-KTTH on the 23rd of July, 1993, No.4915-KTTH on the 30th of September, 1993, and No.2415-KTTH on the 5th of May, 1994).

3. For different groups of used commodities pertaining to the readjustment under Document No.250-KTTH on the 19th of January 1994 of the Office of the Government, they must observe the regulations contained in the said document.

B. EXPLANATION OF DOCUMENT:

1. Point II/1 containing "explosive material":

Coalimex alone is allowed to import 4,200 tons. In this case, the Prime Minister has no need to issue document assigning the task to Coalimex. The document of the Ministry of Trade is sufficient. For other cases, there should be documents of the Prime Minister directly assigning the task to the business and according to it, the Ministry of Trade shall issue documents as guidance to the Permit Bureau. For these two cases, the Permit Bureau must rely on the documents of the Ministry of Trade to issue import licenses as prescribed in Regulation No.297-TMDL/XNK on the 9th of April, 1992.

2. Point II/6 mentions "cigarette": in case the importation by businesses has business license for duty-free shops, then, relying on the permit from the Ministry of Trade, the Permit Bureau shall issue import license as prescribed in Regulation No.297-TMDL/XNK on the 9th of April, 1992. In case of transit or temporary import for re-exportation, it should rely on the permit of the Prime Minister and the guidance to implementation issued by the Ministry of Trade.

3. Point II/7 mentions "used commodities": this should be understood as all sorts of consumer goods, not just the commodities put in brackets.

4. Point II/7 mentions "moving property" and Point II/8 mentions "vehicle and special purpose self-propelling means of narrow circulation scope": the Ministry of Trade and the General Customs Office shall have these two problems discusses with the concerned ministries as prescribed in Decision No. 238-TM/XNK on the 24th of March, 1994 and shall provide guidance later. Pending the guidance, the Permit Bureau shall not issue separate import license to any business unless there is a written permit from the Ministry of Trade.

5. Point II/7 mentions "used spare parts": it should be understood to include used components.

6. For those groups and commodities which were previously allowed for import according to the need of production and business but belong to the category of banned imports as from the 1st of April, 1994, they shall be resolved according to Note No. 241-TCHQ/GQ on the 28th of March, 1994 of the General Customs Office and the minutes of the meeting between the Ministry of Trade and the General Customs Office as guidance to the implementation of Decision No. 238-TM/XNK on the 24th of March, 1994 and Circular No. 4-TM/XNK on the 4th of April, 1994.

For the cases beyond the readjustment jurisdiction of Note No. 241-TCHQ/GQ on 28th of March, 1994, the Permit Bureau shall be allowed to issue a new permit or to extend the old permit but only if it is accepted in writing by the Ministry of Trade.

Part Two

QUESTIONS PERTAINING TO CIRCULAR No. 4-TM/XNK

A. AMENDMENTS TO DOCUMENT:

I. Of List No.3:

1. Of two-wheel motor cycles (whole piece and in detached parts):

1.1 New motor cycles, whole piece:

In implementation of the Government policy concerning the concentration of importation of whole-piece motor cycles, the Ministry of Trade prescribes as follows:

a) Each province, each city directly under the Central Government (hereafter called province), each ministry, each ministerial level agency, each other agency of the Government, each central office of mass organizations, engaged in import-export operations (hereafter called Ministry) shall by appointment of the Ministry of Trade have a business for importation of whole-piece new motor cycles.

For Ho Chi Minh City, Ha Noi, the Ministry of Communication and Transport, and the Ministry of Trade... (which are commercial centers, the specialized transport service and trading service), a number of other businesses are appointed to do the job.

With the above provision, the entire country will have in 1994 nearly 100 businesses allowed to import whole-piece motor cycles. The selection of the import business is based on the following conditions:

- Holder of commodity import-export license or specializing in dealing with automobiles and motor cycles.

- Having a higher export turnover in 1993 than those businesses having the same license or the same business lines of the Ministry and province (except export turnover of commodities under the unique control of the State).

- Having not violated State regulations and policies in the export import business in 1992 and 1993.

- Having sent its dossier to the Ministry of Trade according to the guidance in Item 2, Point I, Section B, Part One, of Circular No.4-TM/XNK.

b) The Ministry of Trade shall choose among the above businesses to appoint 14-15 businesses as hard core in each region and in the specialized services of the ministries.

The businesses designated as hard core must in addition meet the following conditions:

- They must have long years of import experience, stable source of supply and large quantities of imports.

- They must have in the years of 1992 and 1993 achieved by themselves all the import quota assigned by the Ministry of Trade (not through other businesses but delegated by other businesses out of their trust).

1.2. Parts in CKD form for the assembly of motor cycles:

a) So far the Ministry of Trade has received nearly 60 dossiers asking to import parts in CKD form for the assembly of motor cycles. These establishments can assemble a quantity of motor cycles 4 times as many as under the 1994 plan. The Ministry of Trade shall check the dossiers before assigning a reasonable quantity for import. In order not to waste the capacity of the assembly line, the Ministry of Trade requests other businesses (besides those having sent their dossiers) not to invest more on the assembly of motor cycles;

b) In the immediate future, the Ministry of Trade shall assign the quantity of parts for import to those businesses having met the conditions filed in dossiers as prescribed in Circular No.4-TM/XNK and having engaged in assembly before 1993. For those assembly establishments which had obtained Certificate from the General Department of Standard-Measure-Quality and which, though not engaged in assembly in 1993 but are ready to produce and have already gone through control, they shall also be considered for licences to import components of motor cycles.

Other assembly establishments having had their dossiers sent to the Ministry of Trade will be considered by the Ministry after a control on the spot is made according to the plan and mechanism of product management agreed between the Ministry of Heavy Industry, the Ministry of Science, Technology and Environment and the Ministry of Trade.

1.3. One month before the expiry of the import license, the businesses licensed to import must sent their report to the Ministry of Trade, based on the report and on the on-site control, the Ministry of Trade shall take appropriate measures for readjustment, including the switch of the whole or the unimplemented part of the license to another business.

2.1. Automobiles of less than 12 seats, whole piece (new series):

In the immediate future, the Ministry of Trade shall assign their import to nine businesses on this principle: the Ministry of Trade shall not assign the quantity in advance, when the business produces its L/C, the Ministry of Trade shall issue the import license according to the quantity listed in the L/C. In case of the importation of a great quantity (more than 50 cars per shipment), the business must ask for permission from the Ministry of Trade before the signing of contract and opening of L/C.

2.2. Auto parts in CKD form:

The importation is first assigned to businesses set up according to the Law on Foreign Investment in Vietnam.

3. The importation of whole piece automobiles and motor cycles in special cases outside the above regulations, shall be considered by the Ministry of Trade on a case-by-case basis.

II. Re-exportation of imported commodities in List No.3 is allowed only when there is permission from the Ministry of Trade, in List No.4 when there is permission from the specialized management office.

III. On the importation of commodities outside the 4 lists mentioned in Decision No.238-TM/XNK and Circular No.4-TM/XNK.

1. Production means comprising machinery, equipment, transport means, spare parts, raw materials, fuel and materials.

1.1. The businesses are not allowed to import used commodities including spare parts, raw materials, fuel and materials.

1.2. If the businesses have their import and export licenses for commodities, machinery and transport means including used ones (except those subject to readjustment under Decision No. 238-TM/XNK) with the unit price of less than 10,000 USD, the Permit Bureau shall consider it and issue the import license.

1.3 If the businesses have their import and export licenses for commodities, machinery, transport means including used ones with the unit price exceeding 10,000 USD, the Permit Bureau shall issue the import license only after receiving a written permission from the Ministry of Trade.

For a number of commodities which are considered now as production means, now as consumption means (e.g. monosodium glutamate, shortening oil), they can be considered as production means only when the business sent a written guarantee to the Permit Bureau proving that the whole of these imported commodities is meant for production.

2. Commodities which are not production means: this concept is to be substituted to various other concepts, such as "consumer goods", "essential consumer goods", "household utensils".

2.1. When considering the issuance of consignment import-export permit, the Permit Bureau shall rely on the following documents of the businesses:

- The import-export business license for a given line.

- The import request with certification by the Bank of the foreign currency surplus at the time the import request is made.

In its request, the business must clearly specify: the name of the imported commodity, quantity, value, import market, mode of payment, payment currency, with certification by the Bank of the foreign currency surplus from the export income to pay for the lot of imported commodities described in the request. The Ministry of Trade shall consider these requests on a case-by-case basis especially if the business has surplus from other income sources. For the implementation of this regulation, all forms of payment according to foreign trade contracts should be implemented according to the regulations and guidance from the State Bank.

2.2. In case the permit has been got from the Ministry or the delivery announcement is received before the day the Permit Bureau receives this document, the business shall not have to ask for certification by the Bank of the foreign currency surplus from the export and shall be issued with the consignment import license on condition the goods must have reached the Vietnam border gate by the 30th of June, 1994 at the latest.

3. The importation of different kinds of foodstuff (like alcohol, beer and other beverages, fresh or processed vegetables), groceries (like garments and knitted articles, hats, shoes, sandals, chinaware, porcelain, glassware, cosmetics) must always get a written permit from the Ministry of Trade.

For the businesses which had imported according to Decision No.405-TM/XNK on the 13th of April, 1993, if the delivery announcement is available, they are entitled to an import license but the commodities should arrive not later than the 30th of June, 1994. This is the deadline according to Decision No. 405-TM/XNK.

B. EXPLANATION OF DOCUMENT:

I. For those commodities which in the past had been imported at the requirements of production and business but which now belong to List No.3, List No.4, they shall be settled as follows:

If the business has got the license for import and export of such commodities, has received the delivery announcement or the bill of lading, or had the L/C open before the day the Permit Bureau receives this document, it shall be issued a permit by the Permit Bureau for the importation of the remaining quantity, but the commodity must arrive at the Vietnam border gate by the 30th of June, 1994, at the latest.

II. On issuance of consignment permit and customs procedures:

1. For import commodities: the Permit Bureau shall issue the consignment import permit to all import commodities.

2. For export commodities: the Ministry of Trade, in agreement with the General Customs Office, shall stop issuing consignment export permit as from the 1st of July, 1994.

- Except for the exportation of commodities pertaining to the Lists No 1,2,3,4.

- Except for special cases like bartered commodities, re-exported commodities, commodities temporarily imported for re-exportation, commodities temporarily exported for re-importation, transit commodities, commodities for exhibition and fair, processed commodities, commodities of businesses set up according to the Law on Foreign Investment in Vietnam.

From now to the end of June is the preparatory period (see Point 5 below), therefore the Permit Bureau shall continue issuing consignment export permits as usual.

3. When filling in the procedures at the Customs Office, the businesses should have their dossiers submitted comprising:

a) For those commodities in the categories not eligible for consignment permit from the Ministry of Trade: in the dossiers made according to the present regulations of the General Customs Office, apart from other documents, there needs only a permit issued by the Permit Bureau for import and export (permission from the Ministry of Trade is not necessary).

b) For those commodities in the categories not eligible for consignment permit from the Ministry of Trade: in the dossiers made according to the present regulations of the General Customs Office, there will be no permit issued by the Permit Bureau and in its place there will be the permit for import-export business (series of 7 figures) or another document from the Ministry of Trade allowing import-export business.

From the moment when this new system takes effect, when it comes to the Customs Office to fill in its procedures for the first time, the business must submit a certified copy of the import-export permit or a document from the Ministry of Trade allowing import-export business; there needs only to produce this permit in the subsequent times.

4. For those commodities in the categories not eligible for consignment permit from the Ministry of Trade (mentioned in Point 3b above): the business has to make an additional customs declaration. The Customs collects this additional declaration which shall be sent periodically once a week to the nearest Bureau of Export-Import Permits. In Hanoi, Haiphong, Da Nang, Nha Trang, Ho Chi Minh City and Can Tho specifically: the Bureau of Import-Export Permits shall directly travel to the Customs of the above-mentioned provinces and cities to collect these declarations once a week. The date of sending and delivery of declarations is to be fixed by the Customs and notified to the Bureau of Export-Import Permits so that it may collect them. The Permit Bureau should discuss and agree with the regional Customs Service on the working program.

5. Time for the abolition of consignment permits to some export commodities:

Before its application in the entire country, experimentation shall be made to draw experience. In the immediate future, the Ministry of Trade and the General Customs Office have agreed to choose the Hanoi Customs, the Haiphong Customs and the import-export businesses of the Ministry of Light Industry, the businesses managed by the Hanoi People's Committee and the Haiphong People's Committee, to carry out this experimentation.

The time for implementation is as follows:

- From April 21, 1994 (after the end of the training courses) to May 15, 1994 is the time to prepare for the experimentation.

- From May 16, 1994 to June 15, 1994 is the time for the experimentation itself.

- From June 16, 1994 to June 30, 1994 is the time to prepare for a wide application.

- From July 1st, 1994 onwards, application to the entire country.

- The provisions of amendments contained in this Circular replace the corresponding provisions in Decision No.238-TM/XNK of March 24, 1994 and Circular No.4-TM/XNK of April 4, 1994 of the Ministry of Trade.

In the process of implementation of Decision No.238-TM/XNK, Circular No.4-TM/XNK and this document, the Permit Bureau and the import-export businesses shall have to regularly report the situation to the Ministry of Trade so that it could take timely and appropriate measurers for readjustments.

For the Minister of Trade

Vice Minister

TA CA